Darden's Pasta Power: Feeding the Bull Market

Ladies and gentlemen, buckle up! We're diving into the world of Darden Restaurants, Inc., where pasta promotions are fueling a bull market frenzy! The company just reported a jaw-dropping 6% increase in overall total sales for the second quarter of fiscal 2025, thanks to the power of menu promotions and perceived value by consumers. Let's break it down!



First, let's talk about the star of the show: Olive Garden. Their Never-Ending Pasta Bowl promotion was a HUGE hit, with diners opting for more pasta refills and adding proteins for an upcharge. This promotion was so successful that Darden extended it for four extra weeks! The result? Olive Garden's overall sales skyrocketed to $1.29 billion from $1.25 billion a year ago, and year-to-date sales at the brand hit $2.5 billion, up from $2.47 billion year-over-year. On a two-year basis, Olive Garden has grown same-restaurant sales by over 6%! That's what I call a pasta party!

But wait, there's more! LongHorn Steakhouse also saw a massive 7.5% increase in same-restaurant sales, up from 4.9% a year ago. Total sales for the brand rose to $710 million from $643 million the year prior, increasing the year-to-date sales total for LongHorn to $1.4 billion from $1.3 billion year-over-year. The company is investing in food quality, and it's paying off big time!

Now, let's talk about the numbers. Darden's total sales for the second quarter of fiscal 2025 were $2.9 billion, up from $2.7 billion year-over-year. Adjusted net earnings per share from continuing operations were $2.03, an increase of 10.3% compared to $1.84 a year ago. The company generated $445 million of adjusted EBITDA, returning $308 million to shareholders, paying $166 million in dividends on $142 million in share repurchases. Darden declared a second-quarter cash dividend of $1.40 per share on the company’s common stock, up from $1.31 per share year over year. That's a dividend increase you can sink your teeth into!



But here's the kicker: Darden has updated its 2025 fiscal outlook. Total sales for the rest of the year are now set at $12.1 billion, up from between $11.8 billion to $11.9 billion. Same-restaurant sales growth is targeted more specifically at 1.5%, compared to a previous range of 1% to 2%, and new restaurant openings are now expected between 50 and 55. This is a company on the move, and you don't want to miss out!

So, what's the takeaway? Darden is cooking up a storm with its pasta promotions and quality investments. Olive Garden and LongHorn Steakhouse are leading the charge, and the rest of the company is following suit. This is a no-brainer for investors looking to get in on the action. So, do yourself a favor and get in on this pasta party while you still can! BOO-YAH!